Significant Break in Coverage (Health Care) Law and Legal Definition

A significant break in coverage is a lapse in health coverage of 63 days or more. During this period of 63 consecutive days an individual would have no creditable coverage. For example, let us assume A enrolls in a group health plan on January 1, 2006. Prior to this A was insured from January 1, 2004 to February 1, 2005 and from August 1, 2005 until December 31, 2005. The period during which A was without insurance, that is between February 1, 2005 and August 1, 2005 is more than 63 days. This period is called the significant break in coverage, and any coverage prior to it cannot be deducted from the exclusion period.

States can increase the number of days that constitute a significant break in coverage, if the individual’s coverage is provided through an insurance policy or HMO. For example, instead of 63 days, a state may allow someone to have a break of 120 days between periods of health coverage. Days in a waiting period will not be counted in determining a significant break in coverage, even though there was no other health coverage during that period.